Market view and Insights
In the current market and industry environment, security is more important than ever. Olivier de Perregaux, CEO LGT Private Banking, explains why ensuring stability and solidity has always been a priority for LGT.
Olivier de Perregaux, we are currently in an environment that is fraught with uncertainty. What provides security in times like these?
Olivier de Perregaux: A solid foundation is pivotal. LGT has been fully owned by the Princely House of Liechtenstein for almost 100 years. Our owner is convinced of the benefits of taking a long-term approach and acting with foresight. And it has a high level of risk awareness. LGT benefits enormously from this, especially in an environment characterized by uncertainty. Having a clear strategy and a focused business model are also helpful.
How would you describe LGT’s overarching approach?
At LGT Group, we concentrate on what we know and do best – private banking and asset management. And we refrain from engaging in more speculative lines of business that involve a relatively high level of risk, such as investment banking. We’re very well capitalized and we have a clear long-term strategy.
How important are stable ownership and organizational structures?
Stable structures give us the room for maneuver we need to pursue our strategic projects long term. And as a privately-held family-owned company, we have greater control over our operations and our decision-making processes. This gives us a solid foundation for future growth and profitability without having to make decisions that favor short-term shareholder returns at the cost of long-term value creation.
Is this risk-conscious approach also reflected in the company’s key figures?
Yes, LGT has a very healthy balance sheet, which we have always managed very prudently. Our liquidity is strong and we are very well capitalized. Our tier 1 capital ratio is well above the regulatory requirement and we are one of the few international private banks whose creditworthiness is rated by independent rating agencies such as Standard & Poor’s and Moody’s. Like in previous years, our most recent ratings were excellent. In addition, the structure of the liabilities side of our balance sheet has remained constant for many years.
You often talk about the alignment between the interests of LGT’s owner and its clients. Can you explain that?
LGT has managed a significant portion of the Princely Family’s assets for many years. As a result, we have first-hand experience in addressing the challenges faced by clients with complex financial needs, and can support ultra-high-net-worth families and private individuals with our tailored advice. And the fact that all parties have the same interests and goal, namely to successfully grow their assets long term, gives them security.
Does the close relationship between the Princely House and LGT have an impact on the company’s culture?
Absolutely. It creates a strong sense of loyalty and identity among our employees, which closely connects us all. It also has a positive impact our employees in terms of their motivation and their commitment in their everyday work. We foster risk awareness and a sense of responsibility among all our employees, while at the same time cultivating a culture of open communication.
LGT has grown steadily since the 1950s, and now has over 4900 employees working out of more than 25 locations worldwide. The company’s growth strategy appears to be paying off.
Yes. We introduced our international growth strategy very early on, and it has become a key pillar of our success. It’s proof of the benefits of never putting all your eggs in one basket. Diversification isn’t just important when you’re investing, it’s also an important part of a business strategy. LGT Private Banking is represented in five financial centers that have received top ratings from Standard & Poor’s: Liechtenstein, Switzerland, Austria, Singapore and Hong Kong.
And all this is reflected in the results?
Definitely. Despite numerous economic and political crises, LGT has never reported a loss in the 100 years since its inception. Group profit in 2022 was CHF 420 million, an increase of 19 percent compared with 2021. And we’re pleased to say that 2023 has also gotten off to a strong start.
Factsheet LGT Counterparty Risk Management
Factsheet Longterm Perspective and Stability